Is Amazon and drone delivery going to hurt FedEx’s contractors?
A lot of people are seriously worried about Amazon taking over FedEx and how that affects route owners.
The story is that Amazon has a couple things going on –
a) Their same day logistics services they’re developing.
b) Delivery drones.
Each of these elements could seriously disrupt the FedEx contractor model, and the Washington Post is one of the major news sources that spreads the ideas about how powerful Amazon is (you DO know Jeff Bezos owns the Washington Post, right?). I’m sure there’s no bias at all there, right?
Regardless, let’s consider the facts of this situation…
Let’s play pretend and say that here in 2017, President Trump disregards ALL safety for mankind and decides to allow drones for delivery. No regulations, no liabilities, no anything…just drones delivering all the live long day.
Here’s the problem with that mattering. The technology simply doesn’t compete with FedEx in its current form – HARDLY AT ALL.
Now, that seems unbelievable at first because most people pondering and wondering about this question have never been on a route. They’re used to getting a package or two from Amazon, or some internet retailers, and presume the rest of the package delivering world is identical to them.
Here’s the reality though.
When we deliver packages to our customers, our customer is NOT just an address.
It’s an old lady that only wants her packages left on the back porch where she can get to it easier.
It’s a concerned person in low income apartments that never wants their packages left outside because people will steal it there.
It’s a business that wants their packages delivered at a specific dock (which means pulling chains to roll up dock doors and closing them when completed).
It’s Walmart that has receivers on duty at specific times and need a phone call prior to even showing up.
It’s a hoarder with hardly anywhere to navigate through their property and you have to knock on the door and hand it to them.
It’s someone in an underground level apartment.
So short of drones buzzing through the sky, blending women and children’s arms up as they navigate through a myriad of areas, it’s just not happening and absolutely absurd to think that a drone could even do this at all.
Are there perfect conditions where a drone can land a package on a designated landing pad where Amazon shows off the idea? Absolutely. Call CNN and NBC so they have some neat-o story to share! But do many customers seem like they can fit that perfect mold? Absolutely not.
Still not convinced?
Consider that FedEx picks up oddly shaped things. Most people don’t know that you don’t have to box something you ship. That’s right – stick a shipping label on an antenna. We’ll take it. Slap an address on a tire rolling around? We’ll take that too. How about a stuffed deer head from the taxidermist and no box at all? Well, even that one surprised me, and I delivered it personally.
Let’s say you think it’s any minute that ALL the massive regulations and dangers are ignored, and the fact that customers are finicky on when and where packages get delivered, and somehow all that magically (and impossibly?!) falls into place.
If even all that somehow happened, it still doesn’t matter…
Drone technology in its current form couldn’t deliver the AVERAGE size package on a FedEx ground route, which is over 40 pounds.
Add in the fact that we accept up to 150 lbs packages, and they’re more common than you think, then you realize the technology simply doesn’t exist, since drones can’t pick up something like that. Now suddenly in order to keep thinking that FedEx has any real threat to drones, you also need to suppose that drones technology changes in a VERY serious manner and we get ones that can carry serious cargo.
At this point, I remain massively unconvinced that drone delivery poses any serious threat to contractors.
I have absolutely no problem telling people routes aren’t a good fit for them, and there are a LOT of reasons to avoid routes which I discuss with my clients, but drones simply AREN’T one of those reasons.
In the future, when there are some massive changes in a lot of ways, I believe drones will become a much more highly relevant part of people’s everyday life. Right now, it’s simply too far out in the future to make any real guesses on how this truly affects FedEx. While it’s naive to believe any business model is sustainable for forever without adapting and changing, I’d also say it’s equally as naïve to consider any potential small or ridiculously unknown risk in the future as a serious factor for avoiding an opportunity that is right in front of us.
Maybe I have you convinced here, but you’re still worried about how Amazon’s real delivery fleet is going to affect FedEx routes. There’s a bit more merit for fear here, but it’s only partially warranted, and it’s important to consider a few aspects of that which I’ll address in an upcoming article about the other main risk points FedEx is rumored to have – Uber, Lyft, Driverless technology, and Amazon Logistics.
It’s hard to figure out all this stuff alone. Schedule a call with me personally or grab a consulting block of time so you can start worrying about the REAL risks of FedEx routes and evaluating those things, and stop wasting time getting caught up in media hype.